Vancouver Weekly Real Estate Update

Success Stories

Congrats to J., an old friend of mine who just closed on her 1st property, a great looking loft at 'the spot' in downtown Vancouver. 2 floors, 16ft. ceilings, you can't go wrong!

Also, congratulations to M. and A. Newly arrived from the prairies, they came to me to help them negotiate the best possible price on a home they've had their eyes on for awhile. Brand new development, still under warrenty and over looking a forest. Perfect.

Congrats also to P and K. who took possesion of their new house in Surrey. They have plans for a daycare among other things, and I'd like to wish them good luck!

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From the News:

What's in store for Greater Vancouver's housing market? What sort of housing market can you expect in 2007? Will the US housing market slowdown hurt our market here in British Columbia? What effect will the 2010 Olympics have on you and the real estate market?
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B.C real estate sales slide for fourth straight month
However, while sales are down, the average home price of $410,728 represented a 20% gain from the yeat before.
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Mortgage Information: Reed Harris, Mortgage Specialist

As a mortgage broker, my JOB is to get my lenders to say YES.

Canadian mortgage lending is a top-down system. Mortgage insurance companies (CMHC, Genworth, etc.) dictate to lenders which types of loans are acceptable (yes, even for conventional lending). Lenders compete within this framework for loans based mostly on rate. Brokers work with borrowers to find the best rate and suitable terms.

Given this rigid framework, what can a borrower do to increase their options? There are 3 things that lenders look for in an application: Credit, Income, Downpayment. Since 2 out of 3 is often enough to be creditworthy, during a mortgage consultation I seek to discover my client's financial situation AS IT STANDS TODAY in order to present the best possible application to my lenders.

First, deal with your income. Income will dictate what size of a mortgage you qualify for. If you don't know how much you make, call your accountant, check your taxes, call your employer. Include your goal of home-ownership in your budget by allocating a percentage of income to a downpayment account. If you don't have a budget, consider that may be an indication that you haven't properly taken personal responsibility for your finances. If you are self-employed for 2 years or more, make sure you keep your credit excellent - this will allow you to "state" your income on an application.

Second, your credit. If you don't pay your bills on time, or are consistently late on credit card payments, your credit will suffer. Some people spend a lifetime being late or delinquent in their payment history, then wonder why they are refused a loan or have to pay a higher interest rate. Get on top of your credit history by ordering a copy from Equifax.ca. I always review your credit history as part of a mortgage consultation. (Some tips: Pay the minimum payment every month. Also, all collections have to be paid prior to qualifying for a mortgage, so just pay them now (even if you're contesting the collection). Same for outstanding taxes. Finally, keeping your balances over 85% of your credit limits will cause your score to drop. Pay off some of each debt to maintain and improve your score.)

Third, the infamous downpayment. Recent changes have made it easier and cheaper to finance 100% of the purchase price of an owner occupied property. Therefore I encourage investors to heavily finance their home to conserve capital for downpayment on additional properties. If you are short on downpayment, it can be received as a gift from an immediate family member. It can only be borrowed or financed when you have excellent credit and verifiable income. Self employed borrowers cannot use a gift or borrowed downpayment if they are stating income.

Each mortgage application is unique - and most problems can be explained away if the rest or the application is strong. Also, reviewing these three items should raise red flags in problem areas, and give you the opportunity to improve your situation.

I can be reached at mailto:Reed@RealEstateFinancing.ca, or call 604 725 7684 to schedule a FREE consultation.

thanks for reading!